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| The Tax Publishers2020 TaxPub(DT) 3153 (Ahd-Trib) INCOME TAX ACT, 1961
Section 54F
Since there was an amendment under the provisions of section 54F wherein the word 'a residential house' was replaced with 'one residential house' and such amendment was brought by the Finance Act, 2014 which was effective from 1 April, 2015 corresponding to assessment year 2015-16 and assessee prior to such amendment was eligible for exemption under section 54F even he makes the investment in more than one residential properties, therefore, it AO was directed to allow benefit of exemption under section 54F for the investment made in both the properties.
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Capital gains - Exemption under section 54F - Two residential units purchased during the year - Amendment to provision of section 54F
Assessee was engaged in the business of advancing money on interest and declared long-term capital gain on the sale of immovable property. Assessee further acquired 2 adjacent residential flats. Accordingly, the assessee against such long-term capital gain claimed exemption under section 54F on account of investment in 2 adjacent residential flats. However, AO during the assessment proceedings found that both the flats though adjacent but were different with each other as there was no common gate between both the flats. The observation of AO was based on the report of the Income Tax Inspector and statements recorded under section 131 of the tenants who were residing in those flats. Accordingly, AO held that condition as specified under section 54F for making investment in a residential property was not fulfilled and disallowed the exemption under section 54F. Held: There was an amendment under the provisions of section 54F wherein the word 'a residential house' was replaced with 'one residential house'. Such amendment was brought by Finance Act, 2014 which was effective from 1 April, 2015 corresponding to assessment year 2015-16. Whether a residential house should be read as one residential house prior to such amendment has been put to rest by changing the language in provisions of the Act but the same was effective from assessment year 2015-16. Assessee prior to such amendment was eligible for exemption under section 54F even if he makes the investment in more than one residential properties. There was no ambiguity that the case before [Tribunal] pertained to the assessment year 2014-15 prior to the amendment brought under the provisions of section 54F. Accordingly, AO was directed to allow the assessee the benefit of exemption under section 54F for the investment made in both the properties.
Followed:CIT v. Smt. KG. Rukminiamma (2011) 331 ITR 211 (Karn) : 2011 TaxPub(DT) 0429 (Karn-HC)
REFERRED :
FAVOUR : In assessee's favour
A.Y. : 2014-15
IN THE ITAT, AHMEDABAD BENCH
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